Despite a double indictment filed against him for a bogus cattle deal in Texas last year, a Colorado man continued a Ponzi scheme that caused investors to lose millions.
Mark Ray convinced investors to give him tens of millions of dollars for his cattle trading and marijuana business, according to court documents filed in Colorado’s U.S. District Court this week. But Ray owned almost no cattle and his wholesale, state-licensed marijuana business was deeply in debt.
The scheme began in 2014 and collapsed in March of this year. Court documents show more than $140 million per month flowed through the accounts of Ray and others involved in the scheme at its height.
The marijuana business, called Universal Herbs, is deeply in debt, according to the documents. And while Ray sent detailed descriptions of the cattle and feedlots he was involved with to investors, the particulars were mostly lies.
“In other words, there were, in fact, no cattle to support the vast majority of purported investments in cattle trading,” according to the complaint. “Instead, Ray simply used new investor money to repay prior investors.”
A grand jury in Texas indicted Ray on two felonies in March 2018 for allegedly stealing more than $30,000 as part of a fraudulent cattle sale. The indictments stemmed from a cattle transaction between Ray and a Stephens County, Texas, victim in December 2016. Ray was accused of persuading the victim to invest in 52 head of cattle, which he alleged to be located in Lampasas County, Texas. The cattle were then said to be relocated to a ranch in Pawhuska, Okla., where they were to be cared for and later sold. When the victim failed to receive his interest in the cattle, he became suspicious and contacted authorities.
In the Ponzi scheme, court documents say Ray for years funneled the millions to pay off prior investors and to line his own pockets, including paying for medical bills, private flights and his own herd of show cattle.
Ray agreed to settle with the U.S. Securities and Exchange Commission to end the agency’s fraud investigation, according to the documents filed by the commission. Ray consented to having his assets frozen and to allow the commission to decide how to take back Ray’s profits, court documents said, but did not admit to any wrongdoing in his settlement.
The state of Illinois in 2005 barred Ray from selling securities there after a similar scheme involving cattle trading.
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